RBS Chief Decides No To Take Bonus

[Seabright]

Just heard on the radio that Stephen Hester has decided not to take his bonus. Too right! He should never have been offered it, the Renumeration Committee should never have approved it and he shouldn't have accepted it to being with.

well, who wanted those shares anyway...

Ds has a question. Didn't this guy take over after the bank failed? Isn't the bank making profit now (even if it is small). So if he has done anything to bring back some semblance of profit and order is he not entitled to a bonus? bearing in mind that financial services are the biggest export of the UK, and are essential to our economy. Surely he as all other bankers who have not made a loss/ been successful deserve an incentive to carry on working in the UK to prevent them emigrating to other international financial cities potentially resulting in a net skills loss here in the UK.

He's been strong-armed into doing it and I think it won't reflect well on RBS in the international market that their board's decisions can be overturned like this. I'm appalled that one man has been so villified and humiliated. Hester, if he has any sense, will be making plans to quit the bank as soon as possible, as will other members of the senior management team.

He's done the only possible thing, but it shouldn't have to come down to him.

It's a real shame that at the time of the bail out, the then Government set it up so that the Public interest was via an "arm's length" body. They should have had the guts to take a proper role, or accept the consequences of not having done so (not whine - again! - about how wrong something is, when it s they who did it).

Labour should also have ensured his contract did not allow for bonuses of this level if they did not want them to happen. Another fail on their part, really, leaving the current Govt with no legal option and then trying to criticise for that very impasse.

Very weak of them, really. When they could have acted in the national interest in the first place and kept us out o this mess. But both foresight in general and dealings with the (sadly massively important) banking sector just aren't their strong points.

Aw, I bet there's going to be a lot of belt-tightening in the Hester household now they're going to have to struggle through the year on his basic £1.2million salary.

Can I just repeat something that I have said before - about the banks moving abroad.

It is highly unlikely.

I live in Geneva. It is incredibly expensive here - the top guys could afford to live here but they would also have to pay much higher wages to back office staff, if they even moved them here.

Wages are much higher, accommodation cost and living costs too.

They simply could not afford to move here. And many other financial centres are similar, although not as extreme.

This is threatened to ensure that the bankers retain their bonuses, but reality is that they don't want to move. Many bankers who moved here in a big huff a few years ago are now desperate to go home, often because their families are not happy here.

I think it is good that he refused the bonus but that politicians, both labour and the ConDems should have had the guts to legislate so that it was not down to personal responsibilities.

The guy stepped into a failing business and turned it around, well done to him, he has earned a bonus, ok it was a ridiculously huge amount by most peoples standards, but not in banking. I wouldnt be surprised if he now made plans to quit....how many of YOU would stay in YOUR job if you were strong armed into turning down a bonus (of whatever amount) for the failings of both your predecessor and the government? The man has worked hard and earned something.
And on a slightly jokey note (not to be taken seriously) on principle, as a public sector worker (government owned bank) shouldnt the unions be defending his right to a bonus? They would be massively up in arms if other ps workers were offered a bonus cut/loss.

RBS's share price has dropped quite a lot over the last year plus it's missed the government's targets for lending to SME's.

Working for a partially state-owned bank is going to come with a salary package which is under mkt rate which means it will not attract the best people. It's incredibly important the bank returns tax payers' money with interest. The only way that's going to happen is by it being well-run by the best people in the business.

We operate in a global marketplace and pay is 'set' globally. The best people have now marked the card of the UK's partially state-owned banks and have probably decided they won't work for them. Don't blame them.

If he decides to leave (he won't flounce, but I think a departure in the next year or so is likely), what calibre candidates will this post now attract?

I've seen lots of

Heresiarch - all banks' share price has fallen over the past year.

Can I suggest that we stop thinking of this business as one that demands incredible skill to run, skills only currently found in the banking sector, and just get someone high up in the civil service to run it instead. Perhaps not such great profits but no great losses either
Wrt foregoing the bonus - firstly I suspect it is going to be paid somehow, but if not, it's a good move on his part but no cause for celebration. What on earth are our political leaders playing at?

I think it's a real shame it's come to this.

Hester took over a complete and utter shambles and has turned it around massively. The renumeration was agreed 3 years ago, the rewards were to be paid in shares so he only really benefits if the changes he put in place are for the long term, rather than cash which promotes short termism.

In that context it's wrong that the press have hounded him, vilified him and the politician's jumped on the band wagon.

I think it shows great strength of character to turn down such a large bonus. Let's face it, how many of us would turn down a bonus worth an annual salary, let alone one which is over £1 million? I know I wouldn't. Especially if it was as a result of my hard work and hitting the agreed targets.

Someone high up in the civil service? Have you seen the almighty mess people 'high up in the civil service' make of running things like Defence and NHS Procurement? They couldn't negotiate their way out of a paper bag. Why do we want second-rate people running a company we badly need to succeed?

But many jobs require people to 'turn things around massively - thats part of his role. On his basic salary I would expect him to have transformed RBS, rather than just gone in, kept the status quo.

This happens in all jobs, not just high salaried banking roles. Its about doing the best job you can and making a difference.

On a completely different scale, but hopefully relavant, I once took a ward sisters job on a ward that was failing. Took me 2 years of hard graft, blood, sweat and tears to turn it round - to the top performing ward in the hospital.

I got no bonus, no performance related pay etc. I chose to take on this difficult work place and make the difference. Its called doing a job.

As someone else said up thread, I'm sure he'll be ok on 1.2 million this year.

the bonus was part of the contract which he was given by labour. It is hypocritical of labour to make a contract with someone, and then accuse the conservatives of being in the wrong for honouring the contract labour made. If labour disagreed with the bonus then why did they put that in his contract. It was not that it was an unexpected reward, it was not it was part of his contractual pay package. the bank was making a loss of appx 26 billon, now it is making a profit of nearly £3 billon, that is nearly a 30 billon difference in their profits since he took over, for which he got a 1.2 mill wage, with nearly a 1 mill bonus in shares which he could not touch until 2014, this is the equivilent of someone increasing a companies profits by £30k, and getting a £1 wage, with a £1 bonus
However i doubt he has lost out, what people forgot in their hysterics was that he was not ging to be able to actually get any hard cash from this bonus untl 2014, as it was given in shares which he could not touch until then, so if the bank failed he woudl have lost the bonus. Now he could just end up getting more hard cash in a couple of years.

And banks do not actually have to physically relocate to move countries, they can just set up skeleton offices in Switzerland, aget the tax benefits there. Besides Geneva is expensive, but not everyone who works in Geneva lives there, the outlying towns and villages are cheaper - lausanne is considerably cheaper and is only a half an hours train journey away. not everyone who works in geneva is rich - they are plenty of shop workers, normal civil servants etc there too.

ll banking shares have indeed taken a fall. even those that didn't get state buy-outs, even those that are turning a healthy profit and forecast to turn more next year.

share price is as much a measure of market confidence as the real progress of a bank.

I'm sure he'll be fine & dandy on his basic salary. but to me this is about the principle of the matter.

If it was agreed and he's worked towards that target then he should get it without getting vilified by everyone else.

Whether or not the bonus should have been agreed in the first place is to me a completely different issue. It's about sticking to your word.

He is, according to the Dept of national Statistics, a public sector employee.

As those of us who are public sector employees can attest, the govt is not so shy about walking all over agreed contracts. Our pensions were renegotiated a few years ago and we are being told now they are going to change despite the contract we signed.

Funny how when it's a banker the rules are different than if it's a nurse, or a paramedic, or a teacher.......

But your comparison isn't a fair apples to apples comparison.

The equivalent would be for you to have hit retirement age and the government saying "Actually....I don't think I should pay you what we agreed, I think we should change it."

Plus the pensions timebomb is at risk (and still at risk in my opinion) of destabilising our economy. The pension agreements of the past should not be allowed to become a suicide pact.

I wonder what his wife said? 'You did what...?????'

Sometimes niceguy it's just about doing the right thing. Yes, this was an agreed bonus etc, etc. But in the current climate with people losing their jobs left, right and centre and struggling to put put food on the table, is it right he should get such a large bonus?

It was right that it was turned down. Sometimes you need to send out the right message to people, and yes, that can be at the detriment to yourself. That's the price you pay if you work in a very senior position.

Nope Niceguy2. We are being told now not when we retire, that the contract we signed is invalid and that we have to start paying more now. Nor can we retire at the time originally stated in our new, renegotiated contracts. So, if he's a public sector employee too, then why can't the govt treat his contract with the same contempt that they treat ours?

With all due respect, according to the Department on national Statistics, he is classified as a state sector employee (it was all over Twitter)